Restructuring: that’s one way the recent wave of take-overs, breakups, and buyouts of major US corporations has been described.

Others see it in more pejorative terms. “Violating the rules of prudence” said a Wall Street Journal editorial. “The buyout bomb,” The New York Times called it. “When everything’s for sale, you lose something,” is the way Harold Geneen, former chairman of the huge conglomerate, ITT, puts it.

Even the lawyers, who sometimes pocket fees running into the millions of dollars from these transactions, are getting nervous. Martin Lipton, one of the best (and richest; he’s the father of “poison pills” designed to thwart takeovers), wrote to his clients in October: “Our nation is blindly rushing to the precipice. As with tulip bulbs. South Sea bubbles, pyramid investment trusts, Florida land, REITs, LDC loans, Texas banks, and all the other market frenzies of the past, the denouement will be a crash.

“We and our children will pay a gigantic price for allowing abusive takeover tactics and boot-strap, junk-bond takeovers. . . . While the rest of the industrialized world is investing for the future, we are squandering our assets in a speculative binge of junk bonds, financial futures, program trading, put and call options and the other games of today’s financial market casinos.”

Some of the most famous names in America are involved. Sears, Roebuck, Pillsbury, Kraft, Woolworth. The amount of money boggles the mind. Philip Morris antes up $13.5 billion for Kraft, a company with sales of a mere $9 billion. KKR (Kohlberg, Kravis & Roberts, the undisputed buyout kings) gobbles up RJR Nabisco for a whopping $25 billion, leaving RJR Nabisco with more debt than the combined national debt of Bolivia, Jamaica, Uruguay, Costa Rica, and Honduras.

The threat of takeover has even put the world’s tallest building—the Sears Tower—on the block, with the expected $1 billion in proceeds destined to help Sears’ restructuring.

What kind of a guy, by the way, is Henry Kravis, forty-four-year-old potentate of the buyout game? Interviewed at length by Fortune after the bloody RJR Nabisco deal, we learn that he is not “greedy.” “Greed really turns me off,” claims King Henry. “To me, money means security.” Henry’s pretty secure, by the way, with an estimated $50 million in yearly income from takeover fees.

Kravis prefers to consider himself “fortunate,” and according to Fortune he “redistributes” his excess income to hospitals, education, and “the fight against AIDS.” (No mention was made about outplacement counseling for the thousands who lose their jobs in these buyouts.)

As for KKR itself, it is now the second largest conglomerate in the US, only slightly behind General Electric in annual revenues. The company’s powerful duo controls a total of $40 billion, enough to buy out all the Fortune 500 companies headquartered in Minneapolis.

KKR and its like have put a lot of companies in play . . . and out of play, over the past several years. From 1985 to 1987 the value of mergers and acquisitions in the US exceeded $520 billion—ten times the value of mergers between 1975 and 1977. Businesses representing up to 7 percent of the total market value of all US companies have disappeared through acquisitions in each of the past four years.

Now even a partner in a leveraged buyout firm—Theodore Forstmann—thinks things have gotten out of hand. As he puts it: “Watching these deals get done is like watching a herd of drunk drivers take to the highway on New Year’s Eve. You cannot tell who will hit whom, but you know it’s dangerous.”

Forstmann thinks today’s financial age “has become a period of unbridled excess, with accepted risk soaring out of proportion to possible reward. Every week, with ever-increasing levels of irresponsibility, many billions of dollars in American assets are being saddled with debt that has virtually no chance of being repaid.

“Most of this is happening for the short-term benefit of Wall Street’s investment bankers, lawyers, leveraged buyout firms and junk-bond dealers at the long term expense of Main Street’s employees, communities, companies and investors,” he added.

Who’s to blame? Bill Neikirk, financial editor of the Chicago Tribune, blames everyone. As he puts it: “Austerity stinks. No one practices it anymore, least of all the nation’s most hallowed financial institutions and corporations, least of all the average shareholder, least of all the Average American. . . .

“We now have the ironic situation of people buying stock in the most solid American firms in the fervent hope that someone will sap the firm’s financial strength.”

Even more ironic, perhaps, is that large institutions supplying funds to the buyout people are often pension funds. “Pension fund managers have become traders instead of investors,” says John Young, president of Hewlett-Packard Co. Conceivably, pension fund money used in a takeover could contribute to the restructuring of the very company—and employees—that fund it.

The $2 billion down payment on the $20-plus billion buyout offer for RJR Nabisco will be provided by the retirement funds of, among others, Coca-Cola and Georgia Pacific (their neighbors in Atlanta!), and United Technologies.

ITT Chairman Rand Araskog, whose pension fund was involved in the RJR buyout, is now having strong reservations. He has called on the Securities and Exchange Commission and the Federal Trade Commission to examine the large mergers. “It’s about time somebody said stop.”

What happens up till then? One result of “restructuring America” is loss of jobs. Due directly to restructuring, more than a half million people were thrown out of work between 1984 and 1986 alone. Many of the casualties had spent 10, 20, or even 30 years with a company. Just five big leveraged buyouts done in the past three years—Borg-Warner, Allied Stores, Beatrice, Storer, and R.H. Macy—cost 114,000 people their employment.

As CBS’s Andy Rooney put it, “these new takeover business leaders are going to eliminate unnecessary jobs and increase the profit. . . . It matters not to the businessmen that they often are firing loyal employees who made the business worth acquiring in the first place.” (Macy’s, incidentally, loaded with $5.3 billion in debt stemming mainly from its management-led leveraged buyout in 1986, recently reported a $19 million loss for its first quarter.)

Robert Greenleaf, a former management educator for AT&T, thinks employees should be the first constituency of concern to management. “When a business manager who is fully committed to this ethic is asked, ‘What are you in business for,’ the answer may be: ‘I am in the business of growing people—people who are stronger, healthier, more autonomous, more self-reliant, more competent.'” Unfortunately, such lofty thoughts are not enjoying top-of-the-mind awareness among buyout firms—or, it seems, significant other sectors of American business today.

Also as a result of takeover pressure, says management expert Peter Drucker, corporate managements are being pushed into subordinating everything (even such long-range considerations as a company’s market standing, its technology, indeed its basic wealth-producing capacity) to immediate earnings and next week’s stock price. “This contributes to the . . . slighting of tomorrow in research, product development, and in quality and service—all to squeeze out a few more dollars in next quarter’s bottom line.”

The current wave of hostile takeovers and restructuring of hundreds of American corporations is a political struggle, not merely an economic phenomenon. At root, it’s a fight over who is to own and control the American corporation: bona fide investors—including the American worker—or traders, greenmailers, and fast-buck artists. Obviously, financial acrobats are having their day, though high-wire acts never last forever. And their falls are generally calamitous.

Why fuss about takeovers and buyouts? After all, you can get as many people swearing by them as at them. First, because the American worker is deeply involved—his livelihood, his family, his peace of mind. And second because, as Drucker says, while there is a great deal of discussion about whether they are good or bad for the shareholders (generally good, short term), “there can be absolutely no doubt . . . that they are exceedingly bad for the economy. They force management into operating short term.”

The threat of buyouts forces management into doing stupid things to keep from being raided—like spending its money on poor acquisitions, simply so that this money isn’t on the company’s books, waiting to be “absorbed” by a raider.

Worse still, says Drucker, is that after the successful takeover, the morale in a company is destroyed, often forever. The people who can leave do, and the others do the minimum. As he puts it: “what’s the point in my trying to do a good job if the rug will be pulled out from under me tomorrow.” Add to this, says Drucker, the fact that the raiders, in order to reimburse themselves, usually start out by selling off the company’s most promising businesses. “Hence the impact of a takeover on morale is total catastrophe.”

Harold Geneen agrees. “You can’t fool people in companies,” he told Forbes. “They know what you’re like, and if you are the kind of person that would sell those people off because you could make $2 extra, they will know that about you and you will not be a good leader for the rest of the people.”

Geneen contends the argument that buyouts create greater management efficiency—due to the pressure on them to pay off the huge debt load—is specious. He says that while managements may be more effective in generating short-term cash flow, what’s being overlooked is having organizations that have a long-term feeling and objectives. Kind of the difference between marriages made under the gun in Reno versus those in church.

“This is important,” he says, “because you get something out of the employees that you’re not going to get out of a leveraged buyout group. People can contribute a lot to business if they’re so minded, or they can just go through the motions. . . . Morale is 80 percent of the competitive edge, and it’s very hard to maintain this kind of morale if you’ve got a tremendous financial debt that’s making you do things you wouldn’t otherwise do.”

How soon until normalcy returns? It may not happen for awhile. There is an unprecedented amount of leveraged money—some estimate $85 billion—available today, searching for targets of opportunity. As a result, virtually every company in America feels threatened.

On the other hand there seems to be a growing awareness that, with all this debt, the US may be mortgaging its future. Chairman Greenspan of the Federal Reserve Board has already asked the US Senate to consider changing the tax laws to discourage massive takeover borrowings.

And in recent testimony before the Senate Finance Committee, Treasury Secretary Brady had harsh criticism for the buyout craze, saying he has “a growing feeling that we are headed in the wrong direction when so much of our young talent and the nation’s financial resources are aimed at financial engineering while the rest of the world is laying the foundations of the future.”

Which perhaps explains the anxieties of the individual shareholders, who have fled the stock market in droves. They may be waiting for a signal that when they invest hard-earned savings, they’re actually helping to build the country, rather than getting involved in a short-term crap shoot.